Social Limits and Collective Action

The argument in Fred Hirsch’s controversial book Social Limits to Growth is both a simple and an important one: analogous to the much-discussed physical resources constraint on future growth in the GNP, there exists a parallel social resources constraint on expansion. The latter is more immediate, less ‘distant and uncertain’,1 than the former, and has two dimensions. First, the adding-up problem that when it comes to social scarcity there exists a number of goods whose function is ‘positional’, whose income-elasticity of demand is high but whose price-elasticity of supply is either low or zero; Second, the ethical problem that a decay in friendliness, generosity and even honesty is likely to occur in a world where economic men see clearly and correctly that a sense of moral obligation bears no significant (or predictable) rate of return.